Over the past few decades, rapid technological growth has transformed entire industries and prompted the development of new business models. In a wide variety of sectors, including telecommunications, information technology, transportation, manufacturing, biotechnology, energy, finance, and healthcare, markets have undergone significant and disruptive changes. Many of these markets have integrated across countries during a prolonged period of economic globalization since World War II. Recent and future innovations (e.g., in artificial intelligence and other emerging technologies) will likely accelerate and reinforce these economic trends.
At the same time, there has been a growing movement towards cross-national regulatory harmonization, facilitated by (1) supranational institutions such as the European Union, (2) the harmonization of regulations and policies as part of free trade agreements and (3) the diffusion of regulatory best practices as countries adopt similar regulatory regimes to those of other nations. However, despite such efforts by policymakers to harmonize regulations, cross-national regulations have not kept pace with the increased integration of global markets.
For several reasons, these developments have created a more challenging environment for regulators:
- Regulators are often confronted with rapidly evolving technological landscapes, facing pressures to adapt their regulations dynamically.
- Many markets they regulate are, in effect, global markets, while their jurisdiction is only national or local.
- Unprecedented innovations require novel approaches to regulation that are sufficiently flexible without undermining the public interest role of regulations or stifling these innovations unnecessarily.
As a result, it is imperative to advance our understanding of rapidly changing modern-day markets and how to regulate them most effectively. Without adequate regulatory frameworks, markets can suffer from market failures (e.g., market power, information asymmetries, and negative externalities) and will not function as efficiently as they ideally should. At the same time, it is essential for regulators to implement regulations that correct underlying market failures without impeding innovation or allowing companies to unduly influence regulators through regulatory capture. Drawing on methods and insights from economics, political economy, public policy, business strategy, political science, and law, the Center on Regulation and Markets’ new Series on “Reimagining Modern-day Markets and Regulations” will analyze topics in this increasingly relevant, multidisciplinary policy area.
The Series will feature contributions from experts of diverse viewpoints to elucidate underexplored issues at the intersection of markets and regulations, especially within the context of the rapidly changing market conditions we observe in today’s economy. It is our hope that the new Series provides a valuable resource for policymakers, regulators, business executives, academics, and the public on cutting-edge regulatory topics.